Are Incentives Bribes?

I had a brief twitter exchange last night with Jeremy Meyers (his site here).  The conversation from tweetdeck is represented in the image on the right (first tweet at the bottom of image, edited for space, time and content.)

The discussion started when the concept of Autonomy, Mastery and Purpose (AMP) surfaced in relation to incentives.  For many, since Dan Pink’s book, Drive came out, the concept of AMP is now the gold standard for motivation, to the exclusion of all other forms of incentives.

The key tweet in that exchange that provided me with this post was when Jeremy said: 

“nobody wants to be bribed to do a good job.  we’re adults.”

Jeremy is right.  

First and Foremost – Incentives Aren’t Bribes – Or Are They?

Initially I was going to jump on the use of the word bribe – assuming the definition for bribe would be different than the definition for incentives.  

Uh oh.  They’re not.

For those who don’t want to go google it… here are the definitions:

in•cen•tive  (n-sntv)  n.

Something, such as the fear of punishment or the expectation of reward that induces action or motivates effort.

bribe  (brb)  n.

1. Something, such as money or a favor, offered or given to a person in a position of trust to influence that person's views or conduct.

2. Something serving to influence or persuade.

A Rose by Any Other Name

There is so little difference in the definition of those two words they could be used interchangeably.  And that is the black shroud that covers the entire incentive discussion today.  Heck, in Europe (at least in the British blogs I follow) they use the word “schemes” to define incentive programs.  Combine a bribe with a scheme and you get such a negative image it’s no wonder companies are looking for other ways to achieve results.

I can’t argue the word choice – technically incentives by definition are bribes.  I don’t like it but I’m stuck with it – thanks Mr. Webster.

In Context

But let me ask this…

• Is a tax credit for installing green energy options (solar panels, updated HVAC) a bribe?
   
• Are tax credits for education expenses a bribe?
   
• Are discounts on health insurance for taking a health screening exam a bribe?
   

Most of you would say no.  Why?  The application of the incentive defines it.

So in other words – incentives when properly designed (read that again) are not bribes. 

Incentives Aren’t About Doing a Good Job

This is where the real disconnect lies.  

Incentives shouldn’t be designed to drive people to do a “good” job.  Incentives should be designed to get people to do a “new behavior” or provide a reason to stop doing one that is counterproductive.

No business is set in concrete.  Every day something new and different is presented.  And in the vast majority of cases properly trained and managed folks in your organization can adapt and address those changes.  But in many instances the change your organization requires is much more than can be handled through autonomous responses from your employee base.

What if your organization needs to adopt a new reporting system, more complicated for the user but it will really drive business performance?  You need to get your employees to learn it and use it.  But what if your purpose-driven autonomous masters in the organization won’t change their behavior to use the new system?  What if the change is just a little too much for them to adopt on their own?  Wouldn’t a well designed incentive to try the system, use it and train people on it be more effective than a mandate from on high?  That’s a good application of an incentive. 

In that case the incentive isn’t designed to bribe people to do a good job. It’s a way to break behavioral inertia and get employees to adopt a NEW behavior.

Don’t get me wrong. I’ve said it before and I’ll say it again – providing autonomy in a job focused on a specific purpose is a good thing.  Do it.  

As adults in most normal, well-run organizations we don’t need to be bribed to do a good job.  That’s a fact.  

If your team is doing a good job, are connected and aligned with the business purpose and are working to their potential - AND - your business isn't changing daily, hourly, weekly - you don’t need an incentive program.  In fact, you could actually do more harm than good in this case.  

But let's not ignore a powerful and effective (when done right) way to guide new behaviors and remove bad ones.

Thoughts?  Are incentives always bribes?  

Comments

[Kurt Nelson]

Paul,

This line says it all, "Incentives shouldn’t be designed to drive people to do a “good” job. Incentives should be designed to get people to do a “new behavior” or provide a reason to stop doing one that is counterproductive." nuff said...

K

[Paul Hebert]

I agree but most folks think incentives are to get people to do their current job. Or as one of my twitter followers mentioned - if there is no trust in the company between employees and management every incentive will be a bribe. They are conditioned that there is something duplicitous going on.

When we can get companies to look at incentives as "a" way (not the only way) to guide (not necessarily drive) behavior we will have made a breakthrough. Thanks for stopping by and commenting Kurt.

[Scott Crandall]

Paul --- Does research show what my gut tells me? To wit, does the more a given person is "AMPed" into their current behavior (or the stronger, more pervasive the existing culture) is change from the current norm harder, or more stressful, or otherwise more necessary for something (incentives?) to "encourage" the change? Intuitively it strikes me that such should be the case, driving the need for incentives (properly designed and properly targeted) to help drive the change. What do you (and/or others) think?

[Paul Hebert]

Couple of things come to mind as I read your comment Scott.

1. If the current culture is very pervasive then a combination of incentives and recognition (and punishment via firing, etc.) will be needed to move the needle.

2. If the culture is okay - just the direction the business needs to take then incentives can be gentle nudges.

3. If the culture is bad - then no incentive will make it good - it would probably make it worse.

The net net in my mind is that AMP focuses on "how things are done around here" and less about "what things are done around here" - culture and recognition focus more on the "how" - incentives focus more on the "what".

In order to change the "how" that is a big effort - from the CEO on down - the other can be done on a more surgical/tactical level. IMHO.

[EvaRykr]

Incentives vs. bribes... this makes me think of influence vs. manipulation. Same, but different.

[Paul Hebert]

Excellent! Exactly. What a difference a word makes eh? Thank you for commenting Eva.

[keith]

Paul,
It seems evident that sometimes events require a significant shift in business strategy. This shift may call for effectively changing "what things are done around here" in an organization. This, in turn, calls for a change in leadership attitude and mindset. A traditional argument might be that you will change attitude by changing behaviour and that well designed incentives can shift behaviour and therefore cause a change in mindset.
However, if for example, one of your fundamental assumptions about leadership is grounded in a hiearchial perspective, any behaviour change will still incorporate top down elements. Whereas that assumption is what may need to be shifted
So, from this inside/out perspective, what kind of incentive (or bribe) might be sufficient or necessary to encourage a leader to abandon his/her internal success formula (assumptions) that got them to where they are?
Keith

[Paul Hebert]

Great question Keith. You would think that the growth of a company, increase in stock price and/or income growth would be enough of an incentive to move a leader to change their "internal success" formula.

My read is that leaders don't change their internal success formula because of a variety of cognitive biases at work. Most leaders fall victim to two major biases the act as shields against change -

First - the self-serving bias where they attribute successes to their effort and intelligence but attribute their failures to situational factors beyond their control. In other words - "my thinking was right but this happened..."

Second - false consensus makes them believe their way of thinking is shared by everyone else. In this case a leader's direction and formula for success isn't just his/hers - it's everyone and everyone can't be wrong.

I don't think incentives are the way to fix this issue. To me it is more an issue of education and understanding. If I know I have the tendency for these types of biases then I can put in place processes and plans to address them, confront them and analyze them. A good leader always asks - "am I right or do I just think I'm right?"

To me this is reminiscent of the "Innovators Dilemma" - it is difficult to see the future if you're always focused on being successful today.

Great question Keith - but the net-net is - this is a training and leadership issue - not an issue of incentives. IMHO.